Medifast Inc. is aiming to ramp up its production of health and wellness products with the creation of a research and development center in Owings Mills.
The Baltimore public company — which hit $1.5 billion in sales last year — on Thursday offered an inside look at its nearly 20,000-square-foot Medifast Product Innovation Center at 11515 Cronridge Drive. Dave Fields, of CBRE, helped Medifast secure the lease with the site's owner, St. John Properties.
The more than 20 Medifast (NYSE: MED) employees at the center are charged with creating products aimed at helping people achieve a healthy weight. The two-month-old center gives the company the ability to manufacture small batches of products to test for texture and taste before they enter into mass production, said Doug Zimmerman, vice president of research and development.
"We have more equipment to perform tests and be less disruptive to our manufacturing line so we're not taking time away from high-speed manufacturing to run trials," Zimmerman said.
The company has a separate manufacturing facility in Owings Mills and is headquartered in Baltimore's Harbor East.
The new center will eventually house up to 40 food scientists, quality assurance specialists and engineers, he said. Products being made and tested there include the company's Optavia line of smoothies, soups and bars.
The building was created with ample space for collaboration, Zimmerman said, along with a large amount of natural light. He hopes the amenities will help the company hire and retain talent in a competitive job market.
“Let's invest in the technical areas, so we can invest in that talent and help that talent grow,” Zimmerman said.
Though the center highlights the manufacturing aspect of Medifast's business, the company has been moving away from its image as a manufacturer.
CEO Dan Chard, in an interview Tuesday, said the company has focused more on the coaching aspect of the business in recent years, which has led to greater success. Divisions of Medifast that sold products through doctors offices, a franchise system, and direct to the consumer, were all shut down in the past five years to focus on the coaching model.
Medifast has had a strong 2022 with a sales growth of 22.6% in the first quarter.
“We used to view ourselves as a manufacturer and distributor of products,” Chard said. “We changed that and now we view ourselves as a health and wellness company.”
Medifast coaches are mostly clients of the business. Though the company’s growth declined during the first year of the pandemic, Chard said the company has rebounded to continue to grow, surpassing the $1 billion mark in sales last year for the first time.
“We grew faster after the pandemic started to relent,” Chard said. “I wouldn't say that the pandemic was a benefit to us, but we did just fine during the pandemic, and the reason for that is people became more focused on health.”
Even before the pandemic, Medifast coaches were adept at using social media to recruit new customers and interact with current ones, Chard said. The company has a digital innovation center based in Utah, along with two apps, one for coaches called Connect, and one for customers, Optavia. The Optavia app helps customers connect with their coach and manage their Optavia plan. The app also includes a recipe library.
"Ultimately, we see that app continuing to develop to the point where it will take your ingredient list and go to an online grocer and have those ingredients delivered directly to you," Chard said. "That's the future."
Matt Hooke covers technology, health care and innovation for the Baltimore Business Journal and Maryland Inno. He can be reached at mhooke@bizjournals.com or 410-454-0504.
